October 18, 2007

 

CBOT Corn Outlook on Thursday: Up 3-5 cents on weak dollar, e-CBOT gains

 

 

Chicago Board of Trade corn futures are expected to start trading 3 to 5 cents higher Thursday as the lower value of the U.S. dollar and stronger prices in the overnight electronic trading session are expected to support prices at the opening of day session trading, analysts said.

 

In overnight electronic trading, December corn gained 4 1/4 cents to US$3.62 1/4 per bushel and March rose 5 cents to US$3.79 1/2. E-CBOT volume in December was 5,381 contracts.

 

"It's all about the dollar," a commission house analyst said. The greenback made new lows in overnight trading and it should support commodities across the board including corn, the analyst said.

 

Favorable weekly export sales may also add support to prices, with sales above analyst expectations, a trader said.

 

The U.S. Department of Agriculture reported weekly corn export sales totaled 1.852 million metric tonnes for the week ended Oct. 11, well above the 900,000 to 1.4 million metric tonnes expected. Japan was the largest buyer on the week.

 

Corn may also be underpinned by technical buying if the market can get above near-term resistance levels. Harvest delays in parts of the U.S. Midwest might also limit selling interest, the trader said.

 

In the western U.S. Midwest, dry weather will return to the region Friday and Saturday, with a chance for light showers with locally heavier showers possible on Sunday, DTN Meteorlogix said. Temperatures will be above normal in the period.

 

In the eastern U.S. Midwest, light to moderate showers and thundershowers with amounts of 0.25-1.00 inch and locally heavier are expected through Friday in northern areas of the region, Meteorlogix said. Dry weather returns Saturday with a chance for light to moderate showers Monday and Tuesday.

 

On daily open auction technical charts, December corn closer lower Wednesday pressured by additional profit-taking from recent gains, a technical analyst said. Market bulls' next upside price objective is to push prices above solid resistance at US$3.68 per bushel, which is the top of a big downside price gap on a daily bar chart. The next downside objective is to close prices below solid support at US$3.50 per bushel.

 

First resistance for December corn is seen at this week's high of US$3.62 1/2 and then at US$3.68. First support is pegged at this week's low of US$3.54 and then at US$3.50.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled mildly lower with the May contract down RMB8 at RMB1,643 a tonne.